Tesla has already cut its prices in half, can it do it again and become mainstream?

For Tesla to truly achieve its mission, it will need to become a mainstream automaker while keeping prices reasonable.

Tesla has cut its prices in half over the past five years, according to a recent article published by Electrek. These price cuts make the US EV maker’s most popular models more affordable for the masses, but Tesla isn’t quite there yet. Maybe he can cut those prices in half once again, and sooner rather than later.

If you read CEO Elon Musk’s words and Tesla’s mission in general, you’ll learn that the company’s goal is to convert the masses to electric vehicles. While Tesla has made it abundantly clear that it’s fine if these electric vehicles are made by rival brands, it’s clear that it has been working diligently to grab as much of that market share as possible. by himself.

Tesla is not a luxury brand and has never pretended to be. He calls his cars premium because they are probably nicer than the typical non-luxury car, although not as nice as an Audi, Mercedes or BMW.

That said, Tesla vehicles don’t come cheap, so they’ve been lumped into the luxury category for years. While luxury automakers don’t tend to sell large numbers of vehicles that aren’t meant for the mainstream, Tesla has been a notable exception. People seem willing to pay more for the brand and technology than they are willing to pay for a “normal” luxury car than their non-luxury cousins.

As the average transaction price of a new car climbs to nearly $50,000, some of Tesla’s electric vehicles don’t seem so expensive anymore, especially after recent price cuts and considering the money you’re likely to save in fuel and maintenance costs. Tesla’s prices are now below the price of most luxury cars, as well as competing electric vehicles produced by luxury automakers.

It doesn’t take a ton of research to realize that the prices of at least some of Tesla’s vehicles are more in line with successful non-luxury rivals like the Ford Mustang Mach-E and the Kia EV6 . Also, while the latter two models are not luxury crossovers, their design is much more premium than that of a typical car, which is arguably the case with Tesla models.

We can’t say for sure that Tesla had it all planned out, but it looks like with the prices of the Model 3 and Model Y, Tesla is moving into the mainstream EV space. It’s no surprise that this is the direction Tesla is headed, as its goal is to sell electric vehicles to the masses, and a typical luxury automaker would not achieve that goal.

As Electrek points out, Tesla prices have dropped significantly over the years. To put things into perspective, the post included the following slide from Tesla’s earnings:

Sure, Tesla prices went up last year and are at a low point right now. They will almost certainly continue to fluctuate for years to come. However, the average new car transaction price is rising as automakers continue to introduce expensive electric vehicles to the market, and Tesla is lowering its prices and still enjoying what appear to be the best margins in the business

As Tesla moves forward, the goal is to produce a new platform to make even more affordable cars, which will apparently be mainstream electric vehicles for the masses. If the relatively expensive Model 3 and Model Y can take the world by storm and become electric vehicles for the masses, one can only assume that a new platform to produce electric cars at half the cost of current D-level vehicles ‘Tesla’s entry would appeal exponentially. more massive audience.

Elon Musk mentioned the potential new platform in November 2022. Tesla already confirmed in January 2023 that the platform is in development, and we recently learned that Tesla will talk about it at its upcoming Investor Day on January 1 March 2023. We know that too. that Tesla China plans to design and produce a ~$25,000 Tesla EV for global consumption.

What do you think of all this? We’d love to read what people have to say about Tesla’s potential future as a mainstream automaker that offers much more affordable options.